UAMPS Representative Mason Baker speaks to BPU and Council members during a special joint meeting on the Carbon Free Power Project. Photo by Kirsten Laskey/ladailypost.com
By KIRSTEN LASKEY
Los Alamos Daily Post
kirsten@ladailypost.com
The Los Alamos Board of Public Utilities (BPU) and the Los Alamos County Council is considering taking the next steps in the Carbon Free Power Project. The question facing them is whether to sign a Power Sales Contract.
The project was discussed during a joint BPU and County Council meeting March 6 in Council Chambers.
In its March 21 meeting, the BPU will be asked to present a recommendation for Council to either approve or disapprove signing the contract. County Councilors will hear the recommendation during their April 3 meeting.
The County’s Department of Public Utilities (DPU) is exploring the Carbon Free Power Project through its membership in the Utah Associated Municipal Power Systems (UAMPS). The project is a projected 600-megawatt small modular reactor (SMR) facility. As it is being designed, the facility would house up to 12 NuScale nuclear power modules, each capable of generating up to 50 megawatts of electric power.
If Los Alamos continues in the project, it would have 8 megawatts. The project fits with the County’s objective to be carbon neutral by 2040, and could replace the county’s base load power that will be coming offline when the county’s contract in the San Juan Generating Station (a coal-fired plant) expires in 2022.
According to agenda documents, the decision to proceed with signing the Power Sales Contract is not a decision to construct the Carbon Free Power Project but gives the County the ability to preserve the option to participate in this project if further development is warranted.
UAMPS members are hoping to increase the number of subscriptions in the project, which is currently at 183 megawatts.
During the meeting, it was emphasized that the first $6 million in development costs for the Combined Operating License Application (COLA) would be 100 percent reimbursed to the project participants if, in March 2019, the project is terminated by UAMPS.
Additionally, the agenda documents reported that project participants can unilaterally exit the project at this point for any reason, with no obligation for further development costs. While project participants would not be reimbursed, the Power Sales Contract does provide a contractual maximum to a participant’s cost exposure during this period.
If in March 2019, UAMPS decides to proceed with the project, but the BPU and the Council decide to exit unilaterally, the county’s minimum exposure would be $20,000 and the maximum exposure would be $80,000. Another option, according to Public Relations Manager Julie Williams-Hill, is that “Los Alamos could sell its 8 megawatts to another project participant, in which case the county could recover all of its investment.”
If the County chooses to proceed through both phases of the licensing period, its total cost would be $7.6 million. If in June 2023, the County elects to proceed with construction, its share would total $49 million for a total combined cost of $56 million of the total $4.2 billion SMR facility. After the $56 million is financed through UAMPS, the cost of the resource rolls up into a projected $45-65 per megawatt hour. UAMPS and NuScale have agreed to a price ceiling of $65 per megawatt hour.
Councilor Antonio Maggiore wondered about the current low number of subscribers in the project. He said 30 percent of the project hasn’t been sold. He wondered why this was brought to ratepayers when there are so few subscribers to the project. Maggiore also asked what was the benefit to getting in on the project so early.
DPU Deputy Manager Steve Cummins explained this is the next big decision the community needs consider. He added it is a big investment and the County has worked to minimize costs; plus, the project is starting to gain traction for adding subscriptions.
DPU Manager Tim Glasco said the County’s subscription would help ensure the project continues. If the project doesn’t get the subscriptions, he said, it will fold.
Councilor Pete Sheehey wondered about UAMPS’ efforts to get the Department of Energy (DOE) or Department of Defense (DOD) invested in the project. He said, “DOE is discussing taking two modules for research itself. That would bump us to half subscribed.” However, Sheehey said it takes the federal government a long time to do anything; he asked if there was any commitment by either DOE and DOD to get involved in the project by 2019.
Cummins said 11 DOD and DOE facilities could potentially join the project and though UAMPS is working on it, it is hard to get all these agencies to meet together.
BPU Chairman Jeff Johnson asked how the decision to abandon the project and seek reimbursement would work.
UAMPS Representative Mason Baker said the progress is tracked monthly on subscriptions and cost sharing. If goals are not met, in the first quarter of the project, UAMPS project management committee would vote on ceasing development of the project and seeking reimbursement.
To better inform council and BPU on this project, Jackie Flowers, General Manager for Idaho Falls Power, was invited to speak about UAMPS. Flowers is also the chairwoman of the board for UAMPS.
Glasco explained some of the concerns, raised by the public as well as the board and council, stem from an unfamiliarity with UAMPS, how it is organized and how the County stands in UAMPS’ organization. He added Idaho Falls is similar to Los Alamos because it is a municipal power, and it is a power producer. The city owns hydroelectric plants.
He added Idaho Falls is also in the DOE community; there is a national laboratory in the city.
“So we have a lot in common and I felt that Ms. Flowers could give a perspective …(on) what is to be a member of UAMPS and how its projects are organized,” Glasco said.
Flowers explained Idaho Falls Power has provided electric service to the town since 1900.
“I like to tell the story we dropped that first generator in Irrigation Canal to power the street lights when there was not a full moon and it always reminds me how much times have changed; with how we use electricity and how much we rely on it in our economy,” Flowers said.
Flowers said her municipality’s last attempt in investing in generation locally was in the 1990s. A river hydro power project was explored but after spending $2 million and getting tangled in environmental issues, she said they realized as a small utility they didn’t have the appetite to invest in generation alone. As a result, Idaho Falls joined UAMPS in mid 1990s.
UAMPS, Flowers said, is a scheduling agent. “They basically serve as an extension of our staff.” They help with scheduling the city’s hydro power resources, third party purchases of power and Bonneville Power Administration resources. Plus, she said, UAMPS is valuable in negotiations with transmission contracts to get power to the city center and coordinating conversations with balancing authorities.
Flowers added UAMPS develops and invests in generation resources and brings resources forward at the interest of its members.
“UAMPS is really us, the membership,” she said. There are 34 UAMPS members involved in the carbon free power project.
Idaho Falls has done contracts similar to the carbon free power project with UAMPS in the past. She explained one did not come to fruition but Idaho Falls was made whole. The small modular nuclear reactor is the third. The contract for the nuclear reactor has common terms and conditions to other contracts but has some unique things such as a number of safety nets and the number of on and off ramps to get involved or uninvolved in the project. Plus, there is an economic competitive test.
In short, “We have found tremendous value in our UAMPS association,” Flowers said.
During public comment, Los Alamos resident and former County Councilor Robert Gibson spoke in favor of sticking with project.
“I would like to address this evening a single aspect of this complex decision: Uncertainty or risk. There’s certainly risk in this project as in any. There’s risk in all sources of electrical power,” Gibson said. “The only approach to the electrical challenge that involves negligible risk or environmental impact is to use our energy much more efficiently than we do. Unfortunately, there’s no broad popular support for that approach. People want utilities to solve the problem.”
Gibson pointed out whether it is hydroelectric, solar, wind or just buying power from the market, each comes with risks and challenges.
“That brings us back to nuclear. Because this project is being studied so intensively…I suggest it may have less uncertainty than any other source beyond the hydros. If we are concerned as we should be about the risks in this project please keep in mind the risks in all other potential new sources also,” Gibson said. “How do we best mitigate these risks? The same strategy we have used since the mid 80s: diversification. Hydros, nuclear, solar with storage as it makes sense and market power. I encourage you to keep our options open on this as the carbon free project team works to further reduce its uncertainties.”
DPU Deputy Manager Steve Cummins discusses the Carbon Free Power Project. Photo by Kirsten Laskey/ladailypost.com
